Da Nang Looks set to be the Singapore of Vietnam - Vietnam Briefing News
By Edward Barbour-Lacey
HCMC – With its burgeoning technology and IT industries and its increasingly attractive business environment, Vietnam’s port of city of Da Nang is well on its way to accomplishing its goal of becoming the Singapore of Vietnam. Over the past five years, the city has undergone a building boom, spending US$4.5 billion on infrastructure projects. Additionally, for eight years in a row, the city has been top ranked in the Vietnam Provincial Competitiveness Index for the categories of good governance and business-friendly policies.
Da Nang is the country’s third largest city and is the main commercial and educational center of central Vietnam. The city is well known for its clean environment, beautiful beaches, and good public services. It is often referred to as the most livable city in Vietnam. Currently, the city has an estimated one million inhabitants in its urban areas, although the city’s master plan calls for a population of over two million by 2020.
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Chief among Da Nang’s new infrastructure projects have been the development of the Da Nang Hi-Tech Park and the Da Nang IT Park. The Hi-Tech Park is currently under construction and will consist of over 1,129.76 hectares once finished. The park aims to boost science and technology development in the city by attracting both foreign and local investors. In particular, the park is offering the following financial incentives:
- Tax rate incentives: a 10 percent tax rate for a period of 15 years (calculated from the first year the enterprise earns revenue)
- Tax reduction and exemption: a four-year tax exemption, and a 50 percent tax reduction for the next nine years (both periods are calculated from the first year the enterprise earns taxable income)
The Da Nang IT Park also offers a range of incentives to high-tech enterprises, including the following corporate income tax exemptions/reductions:
- Zero percent tax for the first four years after making a profit
- A five percent tax rate for the next nine years
- A 10 percent tax rate for the next two years
The IT park also offers up to 50 years of free land lease to qualifying “anchor tenants”, depending on the type of industry and size of the investment.
Other key recent infrastructure projects include the following:
- US$60 million for a new airport terminal
- US$88 million on a new city hall
- US$93 million on a three-level overpass
Additionally, a monitoring system, installed by IBM, provides real-time updates on bus routes and checks water quality. Cisco Systems has installed over 300 kilometers of fiber-optic cable, which connects all government offices in the region.
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A important landmark of Da Nang, and a clear sign of its growing strength, is the recently built Dragon Bridge. The new bridge, which crosses the Han River, has made headlines around the world for its spectacular design. The 666-meter-long dragon-shaped bridge that breathes fire and spouts plumes of water has become a favorite of both residents and visitors. The dragon is one of the most important symbols in Vietnamese culture as it symbolizes power, nobility and good fortune. Therefore, more than just an award-winning architectural design, the Dragon Bridge has become a symbol of the newfound strength of the city.
It is clear that Da Nang is well on its way to becoming a modern city with an effective and transparent bureaucratic system. With its improving business and investment climate, paired with its plentiful financial incentives, the city clearly deserves the honorific of Vietnam’s Singapore.
Asia Briefing Ltd. is a subsidiary of Dezan Shira & Associates. Dezan Shira is a specialist foreign direct investment practice, providing corporate establishment, business advisory, tax advisory and compliance, accounting, payroll, due diligence and financial review services to multinationals investing in China, Hong Kong, India, Vietnam, Singapore and the rest of ASEAN. For further information, please email [email protected] or visit www.dezshira.com.
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